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Avnet (AVT) to Report Q3 Earnings: What to Expect this Time?

Avnet Inc. AVT is scheduled to report third-quarter fiscal 2016 results on Apr 28. Last quarter, the company posted a negative earnings surprise of 2.40%. Let's see how things are shaping up for this announcement.

Factors to Consider

Avnet posted lower-than-expected second-quarter fiscal 2016 results. Year-over-year comparisons were unfavorable, primarily due to a decline in the TS and EM business.

A significant portion of the company’s revenues comes from the sale of semiconductors, which is a cyclical industry, characterized by changes in technology and manufacturing capacity and is subject to significant market upturns and downturns.

Nonetheless, Avnet’s leading position in electronics distribution, continuous cost cutting initiatives and acquisition synergies are encouraging. However, competition from Arrow Electronics Inc. ARW and Ingram Micro remains a headwind.

Earnings Whispers?

Our proven model does not conclusively show that Avnet will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 99 cents per share. Hence, the difference is 0.00%.

Zacks Rank: Avnet’s Zacks Rank #3 (Hold), when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Benefitfocus, Inc. BNFT, with an Earnings ESP of +4.00% and a Zacks Rank #2 (Buy)

Align Technology Inc. ALGN with an Earnings ESP of +12.82% and a Zacks Rank #2

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ARROW ELECTRONI (ARW): Free Stock Analysis Report
AVNET (AVT): Free Stock Analysis Report
ALIGN TECH INC (ALGN): Free Stock Analysis Report
BENEFITFOCUS (BNFT): Free Stock Analysis Report
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